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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the benefit of compounding under Section 7(1)(b) of the KGST Act is confined only to granite metals or extends to the by-product M-sand produced by the same mechanised crushing unit.
Analysis: Section 7 provides an alternative method of tax payment in specified situations and the benefit under clause (b) is attached to the mechanised crushing unit producing granite metals. The scheme of the provision shows that the option is unit-specific rather than product-restricted. Once the assessee is a covered crushing unit and compounding is allowed for its main product, the by-product generated in the same unit cannot be segregated for denial of the compounding benefit. The Court also noted that the separate classification of M-sand under the schedule was not being decided in this revision.
Conclusion: The compounding benefit under Section 7(1)(b) extends to the unit in respect of both granite metals and the by-product M-sand, and the Revenue's challenge fails.
Final Conclusion: The revision was rejected and the Tribunal's view granting compounding treatment for both the main product and the by-product was left undisturbed.
Ratio Decidendi: Where a taxing provision grants compounding to a specified manufacturing unit, the benefit attaches to the unit and covers the by-product generated in the same unit unless the statute expressly excludes it.
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